Bangalore: Indian shares went into a tailspin, falling to their lowest in more than three weeks on Wednesday as the prospects of a recession in the United States spooked global markets.
The Sensex fell 712.22 points to 19,538.87 at 1430 hrs as investors liquidated their position in the secondary market to subscribe to the mega issue of Anil Ambani Group's Reliance Power Ltd, which seeks to raise Rs 11,700 crore.
The Nifty was down 208.40 points or 3.43 per cent at 5865.85.
Reports of world's largest bank Citigroup Inc reporting fresh losses due to US subprime mortgage crisis also weakened investor sentiments. Weak cues from global markets remained
another dampening factor for the bourses, triggering selling even in fundamentally strong stocks.
Selling activity was spread over a wide front, taking its toll on the Reliance pack of shares, including country's most valued firm Reliance Industries, Reliance Energy, Reliance Natural Resources Ltd, Reliance Capital, brokers said.
"The fall is mainly because of the global factors. Our markets had been artificially held up for the last few days despite the weakness in the international markets," said Ambareesh Baliga, vice-president at Karvy Stock Broking Ltd.
The index is now 1.8 per cent below its 2007 close and 6 per cent off from its record high of 21,206.77 hit last Thursday. Asian stocks fell and the dollar hit a 2-½ year low against the yen on Wednesday after a record loss at Citigroup and weak US retail sales entrenched fears the world's largest economy may slide into recession.
All the three major US stock indexes plunged more than 2 per cent on Tuesday. Baliga said Indian markets would continue to follow offshore markets in the short term, and the quarterly profit numbers of leading firms such as Reliance, which reports on Thursday, were unlikely to offer much immediate respite.
HDFC Bank fell 4.8 per cent to Rs 1,700 and top lender State Bank of India was down nearly 1 per cent at Rs 2,390.95, reflecting the bearish sentiment on financials in global markets.
But shares in Tata Consultancy Services Ltd rose 2.7 per cent to Rs 964 on hopes that the top software services firm would report strong quarterly numbers on Wednesday. Tata Consultancy is expected to post an 18.7 per cent rise in quarterly net profit, but a strong rupee and prospects of a recession in the United States, which accounts for about half its revenue, are concerns.
No. 3 software exporter Wipro was down 1.7 per cent at Rs 452.05. The firm on Tuesday denied it was in merger or takeover talks with technology consultant Capgemini, after speculation of a possible bid arose late last year. In the broader market, 1,974 losers led 496 gainers on volume of 98 million shares.
The broader 50-share NSE index was down 1.84 per cent at 5,962.40.
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